Quigo: the Google alternative

A: Google, Yahoo! [NASDAQ: YHOO] and most other blind networks sit in the middle and own the advertiser relationships and all the insight and advantages that come from that. By outsourcing their performance marketing programs to them, publishers get a check, but little else; they don't really build any longer-lasting strategic asset in one of the most important and fastest-growing segments of online advertising.

Quigo's AdSonar private-label approach provides publishers with a platform and enables them to own their advertiser relationships. We bring advertisers from our network into the program, too, along with our technology platform, but it's a "you sell, we sell" model where publishers can also promote and sell into the program themselves. And, even if they choose not to sell into their program, publishers have full transparency into all the advertisers in their marketplace and what they're doing: they can learn who all the advertisers are bidding to their sites, what budgets they set, which placements they are interested in, how consumers respond to their advertising and perhaps most importantly, what unspent budget they have.

Unspent budget is the portion of a cost-per-click advertiser's budget that doesn't get deployed over a given time period. In plain English, an advertiser in the Quigo network may say, "I'll bid $5 per click for the placement on a homepage Fox News, but after I get 200 clicks or a $1,000 per day, don't spend any more." Since advertisers only pay when they get clicks in our performance model, they may not actually spend all $1,000 dollars each day (because there wasn't enough content, too few visitors came to those pages, their ads weren't shown often enough because we showed other advertisers who yielded more, etc.).

What can publishers do with all this insight, and these advertiser relationships and aggregated budget built on Quigo's platform? They can cross-sell and up-sell these advertisers other offerings (other online advertising like display or offline media, new services, and so on). They can also inform their content strategy because they have advertisers and large pools of unspent budget that they already know will spend and do well. Unlike the traditional media model where, like in Field of Dreams, companies "built it and hoped the advertisers came," media companies can build new areas, promote various sections of their site, license additional content, all with the knowledge beforehand that they have advertisers ready, willing and able to monetize those new properties. Their new content can be profitable from day one.

Q: So how has the growth been for your company? The response from customers?

We're a privately held company and don't reveal our sales numbers, but I can say that we have grown very fast in each of the last several years (triple-digit annualized growth). Most importantly, however, this growth has been driven by the results and benefits we've delivered to our customers -- both advertisers and publishers.

There are several other companies out there that are attacking this market and purport to offer what we do, but none of them have the same technology, approach or team that we do. Our staff comes from companies like Yahoo!, Time Warner Inc. (NYSE: TWX), eBay Inc. (NASDAQ: EBAY), Paypal, Avenue A|Razorfish (NASDAQ: AQNT), CNET Networks Inc. (NASDAQ: CNET), NBCI Snap, Juno/United Online (NASDAQ: UNTD), and most have advance degrees. And, we have a passion for performance marketing.

I think we're still only in the early innings of the game. With the continued advances in targeting and optimization technology and new and ever-more engaging ways to connect with and offer value to consumers, we're excited to be participating in this market.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.